By Fe Bongolan
As former International Monetary Fund (IMF) Chief Dominique Strauss-Kahn awaits trial for his alleged assault and rape of a Sofitel Hotel maid, the information and evidence bubbling to the surface becomes more compelling a conundrum. This conundrum almost makes you imagine the possibility of conspiracy: a set-up discrediting the man holding the strings and on the brink of a turning point. That includes two ‘smoking guns’ familiar to Americans: a semen-stained dress, and the potential for the entire European Union’s economic collapse from debt default by Greece — a situation quite similar in seriousness to the US sub-prime lending crisis leading to our economic meltdown of 2008.
Having the wisdom of hindsight from two recent sex scandals that rocked the US — those of President Bill Clinton and former NY Governor Eliot Spitzer — it’s easy to see one way how Strauss-Kahn’s defense team could play his case out in the US courts. Both men in positions of power were taken down by their indiscretions and their respective downfalls used to set up political and economic crime. A conspiracy theory with this type of historical backdrop for Strauss-Kahn’s defense may be plausible enough to provide shadow of a doubt for an American jury, particularly in New York. But before we delve into further speculation on this story, we need to dig deeper and focus on what the IMF, Strauss-Kahn’s former place of employment, does and what was about to happen prior to his arrest on May 15.
Near the end of World War II, the IMF was formed to act as global lender to struggling nations working to recover after that war’s devastation, and by its tradition has been headed by a European ever since. In order to qualify for a loan from the IMF, a country needs to become a contributing member, paying in to a “membership fund” contributing a fair percentage of its gross national income to be used by fellow member nations in need. Memberships are “weighted” based on the amount of a country’s annual contribution using the American dollar as benchmark. The more money you have, the more weight and power you carry.
A loan from the IMF, the ‘lender of last resort’, to help struggling nations regain economic footing comes at a cost: IMF’s Structural Adjustment Program (SAP) requires that in order to qualify for IMF assistance, a country must be willing to submit to economic structural change that may not be in keeping with its traditions, cultural values, or be sensitive to its ecological and environmental conditions. These loans are made with one thing in mind: to move a country, for better or worse, towards development that the IMF can consider a “beneficial asset.” Like all loans from any bank, the IMF requires a high degree of fiscal accountability to the parties involved, which in this case includes the European Union.
It was Greece’s lack of accountability that got them into trouble. Since 2001, the government of Greece has failed to truthfully report its official economic statistics. Over a nine year period, Greece had paid Goldman Sachs and other banks hundreds of millions of dollars in fees to arrange transactions to obscure its high level of borrowing, allowing Greek administrations to spend beyond their means unchecked by European Union overseers. By the time Georgios Papandreou of the Socialist Party took office as Prime Minister of Greece in 2010, his government faced a staggering debt load that denigrated its credit rating to junk status, making Greece virtually unable to pay off its debts without drastic austerity measures. These measures, implemented over the last year, have caused deep social unrest, leading to violent protest and death. They have also not fixed Greece’s insolvency problem.
Dominique Strauss-Kahn was aboard the airliner that was to take him back to a meeting with German Chancellor Angela Merkel on the Greek debt crisis. The meeting’s aim was to angle more capital from Germany, one of the strongest economies in the EU, to keep Greece afloat until it agreed to a debt repayment plan that would not put it or other members of the EU into deep economic jeopardy. Germany had already extended 23 billion euros to Greece to stem its fiscal bleeding in the fall of 2010, at deep political cost to Merkel from members of her own center-right wing party.
Today, Angela Merkel may likely be breathing a short sigh of relief over Strauss-Kahn’s arrest. Without the coordination of the IMF Chief who would bring all the players to the table to deal with this eurozone crisis, the government of Greece may have to agree to the sacrifice of privatizing and selling its principal assets: including the ports of Piraeus and Thessaloniki, and OTE, its primary telecom provider. Imagine the United States selling off the Ports of New York and San Francisco and AT&T and you get the feel of the deal. At least for the short term, Germany is off the hook.
The current leadership void in the IMF raises questions by member nations outside the eurozone to rethink the tradition of selecting a ‘European only’ IMF Chief. Rising economic powers Brazil and China are leading the call for a qualifications-based selection of the new head of the IMF. The lack of transparency in the selection process — also a tradition of the organization — is chafing at the member states who are tired of the American and European grapplehold on the purses of the planet.
For the present, the American justice system is working with facts in hand. DNA evidence on the maid’s dress provides proof of Strauss-Kahn’s participation in a sexual act. Whether or not it was consensual is still up the defense lawyer’s sleeve. Whether or not you subscribe to conspiracy theories, there are plenty of available and convenient circumstances described above that can give you pause to imagine that Strauss-Kahn’s predicament is a set-up on a grand scale, with the strings pulled by the very bankers and heads of state capable of turning countries upside down to insure their own economic stability at the cost of another country’s soul.
As mentioned before in “No Rules,” depending on the strategies of his defense team, the outcome of the rape trial of Dominique Strauss-Kahn may hinge on who and what we value in this world. That may not be so easy an issue to resolve in one rape trial. It may not even come to light at all. But what if it did? Since so many other lives have fallen by the wayside in the pursuit of economic development and stability, what — in the case of a hotel maid who walked into Strauss-Kahn’s hotel room and may have changed history — is one more? That is a string that needs to be tied around and pulled tight on the conscience of the world.
yeah. well. I have feeling this eclipse is wanting to kick my ass to the curb.
I like your analogy, Jer. yes, I did have a mohawk back in the day… blue. lotta eggs to get those spikes to perfect..
damn. does look like I wrote a lot… just kept typin’. I got this power flowing through my veins today.. like a freakin’ superhero…..
am I BACK?????ha! HOO-ha!!!! (cool Charlies’ Angel kick)yahhhhhhhhhhhhhhh!!!
peace.
..That was a kick-ass rant S.I.S..
I’ll have to regain my balance before I can comment..
(..It’s like at a punk show and you just stand your ground, and folk are like, “why didn’t you move?”, and you’re like, “How could you freakin’ move with all that energy rushin’ over you?”.”)
Jere
hello again.
I realize this is 2/p2 but just wanted to throw my 2cents in…
this weekend I watched that movie Inside Job again, about the 08 ec.meltdown?pretty weird.
you have both Eliot Spitzer & Dominique in there as knowledgeable, pro-“cut the shit” commentators…
and of course Eliot was involved in investigating the whole bubble of Internet stocks and the SEC promoting Internet co. on purpose who would fail….and then he went away:
“using personal vices to force him to resign in 2008″….
then it was surreal watching DSK talking in there also & thinking about the situation he currently finds himself in.. (which we don’t know everything about, yes?)
anyway, I found it v. true what you wrote about “both sides possibly being right”. meaning: maybe someone close to DSK or I don’t know, somehow they knew he might have a ‘weakness’ (for lack of a proper PC term???) and they manipulated that. which would be sicko. but..come on’ —-
it doesn’t take much stretch of my imagination to see how that could have happened..i.e. it’s easy to tell when someone is finished showering, etc. (water on/off?) and is likely to be unclothed…and then also the maid could also have been set up unawares, called to the room at a precise moment when ??
anyway, I don’t want to get all wrapped up in that part. just it was peculiar watching that movie and seeing both of these influential men talking about what they knew *firsthand* about the derivatives mkt, predatory lending, deregulation…the whole deal. and how now both of them are I guess “out of their former positions”.
another golden tidbit in there was the fact of how many of our esteemed business schools & high level economics professors are definitely paid to consult/advise on the side, *and* that what they are ‘teaching’ or preaching in these schools is the prevailing tune of Wall Street …not a lot of fresh ideas …as you would think…errrr
at the end, the summary was basically “the financial system/sector has turned it’s back on society ( as opposed to back back in history, it was a part of society, the people who were involved were putting up their own money, banks were local ops, etc. etc. they were integrated into our peoples). now:
-They will tell us we need them
-They will tell us it is too complicated to understand (what they do)
&-They will tell us it ‘won’t happen again’. ( as they spend BILLONs on fighting reform)
yah.
well, don’t want to get any windier on this, just my antennae went up. ( I mean RIGHT before an imp. meeting w/ Angela Merkel……..?????) bullshit meter! antennae! UP!
Once again, for clarification, I’m not condoning any behavior or criminal anything. and I’m not minimizing any rape. but it sure the hell would be pretty slick if you could actually trick someone into their own downfall rather than as you said, have a psych file manifest, or ‘off’ someone…have someone be their own undoing????perfect!!!!!
just sayin’. or agreeing….talk about victims!! damn!! everyone would be a victim, everyone. why can’t people see that.
WeALL become victims when something like this happens. ((sigh)).
oh. BTW, also, when you talk about Greece’s ports being privatized by outside ventures…shitt. I mean it forms a circle, that’s how Iceland got into trouble, when they privatized their geothermal resources, everything went completely haywire, and affected the globe!! uah -started our 08 mess!!!
I know the sits. in Greece now and Iceland then are diff. but still….short-sighted messes!
thanks for the space.not sure anything new was said, but it wanted to come out and cavort with Others…
peace and Light to shine!!! and shine!!!
so helpful to see the dots connected here and the possibilities for greater truth emergent from conversations like these . . . thanks everyone!
btw: much to my surprise this past week saw at least 3 bottles of iodine at Walgreen’s front cash registers at the corner of Mission and New Montgomery in SF . . . certainly reflecting consumer demand and quite available
Fe and Brendan, thanks for the repartee. You opened some closed doors and let in some light that helps me see the human side of the see-saw we are watching economically. Ambition, power, changing of the guard so it will not change as far as the common man and woman are concerned..
This is from Jerome a Paris’ blog: European Tribune
IMF: What European Influence?
by afew
Thu May 26th, 2011 at 03:53:37 AM EST
Alan Beattie in the FT (h/t Eurointelligence) offers an analysis of European power at the IMF – that boils down, he says, to having a large number of board members and nominating the managing director, but having less influence over policy than the US.
“As the biggest single shareholder, the US has exercised a great deal of influence,” Mr Mandeng says. “The power held by the EU has not been translated into the dominant view of the institution.” Europeans have frequently complained that the US Treasury on Washington’s 15th Street – just four blocks from the fund’s 19th Street headquarters – exercises undue influence over IMF policies. Although the US holds only 17 per cent of votes on the board, its greater determination and intellectual confidence has usually prevailed.
…The dominance of economists, especially those educated in the US, has helped to shape the in-house view. Prof Rogoff says that issues are extensively debated but “fundamentally most people in the fund believe in markets and market-based solutions to problems”. It is, he says, an approach quite different from the interventionist instincts of many Asian and European politicians.
Beattie’s historical survey of IMF policies shows the US more willing to lend as long as loans were tied to hardline liberalisation and privatisation conditions, with Europeans favouring less bail-out, more bail-in, and a softer line – but not prevailing.
And now making a bigtime U-turn.
With sovereign debt fears spreading to western Europe in 2010, the IMF has become a minority partner in two of the largest rescue packages on record, for Greece and Ireland. Many investors and economists consider those programmes increasingly unsustainable without forcing private bondholders to take losses on their holdings of Greek sovereign debt and the senior bonds of Irish banks.
With European banks holding much of that debt, however, the traditional European predilection for asking private-sector investors to take a haircut has conveniently been dropped. The European Central Bank and leading continental politicians – especially in France and Germany – have opposed a rapid and substantial restructuring.
…Long accused of being in the pockets of Wall Street, the fund is now coming under fire for pursuing the interests of French and German banks above that of the workers and taxpayers of Greece and Ireland.
As for the “softline drift” of the last decade at the IMF, Beattie ascribes it more to a general change of attitude among American economists rather than the influence of the Europeans sitting at the top of the hierarchy.
Brendan:
Figures. It was La Garde who also cautioned Paulson about AIG’s probably collapse during the “Too Big to Fail” crisis. Europe was also in the business of speculating on bad American mortgage debt.
Fe:
She’s got a lot of American experience, having worked for a big law firm over here for years and in the EU. Dead bodies is right, she’d know.
Speaking of things changing, you’ve heard Mladic was arrested today? Another old boogey man brought to light…
Brendan:
La Garde was one of the key players jumping on Hank Paulson to NOT let Lehman Brothers fail in 2008. It would have collapsed Europe THEN. If there’s anyone who knows where bodies are buried and whose asses need covering its her.
And if you get HBO, look for “Too Big to Fail” or rent it on Netflix when it comes out. Worth it.
Christine LaGarde, current finance minister under Sarkozy, is pushing herself forward for the IMF slot as of today. There is also considerable pressure to appoint someone from Asia/Africa/Latin America (anywhere but Europe/US) as the new head. Time to break the tradition they say, and I’m all for that. That would not just stir the pot, but shake it mightily. It’s time for one of the BRICS to be in charge. How about Lula Da Silva? I like him a lot, does anyone know what his chart looks like?
I’m thinking someone, somewhere, lit a match and that nylon curtain has erupted in flame and is melting away. I’d believe Aries did it, and Uranus was looking the other way.
Brendan:
Another key to the maze.
Coming home tonight I turned on the BBC, and lo and behold what were they talking about? The G8 Summit! Whose was the Big Elephant in the Room? The answer: France! Who was The Person who was NOT there but who was on the minds of everyone? DSK.
The questions facing the summit: what is going to be the role of the IMF? How will it work with the rising econs of Brazil, China and India? What are the economic possibilities in the wake of the Arab Spring? Fukushima? Will stability in Africa be addressed this year? From where will the next IMF leader be selected?
Big doors ahead. Will they be opened because of the scandal? Tradition makes me think no. Uranus in Aries says, hmmmm…
ok, i don’t mean to derail this great train of thought, but eric, i’d like to ask you what you mean by, “She might have had a psych file manifest.”
are you suggesting that she’s mentally ill, her employer just found out, and this was her way of….?
or do you mean that if powers that be had wanted to hide the incident, all the have to do is painter her as crazy and her accusation goes nowhere?
I’d *really* appreciate that clarification, b/c my first thought was that you were suggesting the former, and that doesn’t sit too well with me.
thanks!
THank you, Fe. Your article has raised more questions than I previously had. Eric, I appreciate your question re: who benefits? I’m too far from the situation to understand, but look forward to continuing updates here. THx.
PS Burning – iodine pills have been unavailable anywhere around here since the first wind of Japan situation. It’s cheap to make – no ‘true’ reason at all for it to not be available…..the story of a “run on it” was BS from the first. I’ve been taking kelp.
Very good Fe, this is a great description of what is going on on the surface and least the first layer underneath. There is a huge potential for all manner of financial mayhem to happen, not just the default of one country. Portugal is also on the ropes, although I understand it is not the extreme case that is afflicting Greece. Spain is also in some trouble too.
As Carrie put it, it’s those men “behind the curtains” that worry me. If we see the Euro collapse in value against the dollar, we’ll know there was a reason for all this.
“We now need to look into the ramifications of DSK’s absence. Who benefits? is always the question to ask. ”
And who benefits from everyone looking at this sex scandal and not seeing other, equally important issues? What is going on “behind that curtain” that we are not supposed to notice?
Thanks eric, I owe it to PW to paint a bigger picture.
The intense scrutiny of this case has a feel similar to the Clarence Thomas confirmation hearings and Anita Hill’s testimony, and its a good soul-searcher at that. One that will make for interesting (ahem) conversation at family dinner.
You’re right. If this was part of a conspirocracy, we may not get an answer from the trial’s verdict but by the solvency of nations. The answer will lie in who survives after the dust settles. If it wasn’t, let’s hope the best justice is served.
Fe,
Wonderful piece. It taught me thing or two. Thank you.
Great analysis.
One suggestion: let’s drop the notion of a “conspiracy theory.” There is a reason that there are five separate degrees of conspiracy under NYS statutes alone, numerous federal statutes and parallel laws and rules in every state. There are no laws pertaining to extraterrestrials. Let’s call them theoretical while we have the chance.
The world is run by conspiracy. It’s a kind of conspirocracy.
Meanwhile, laws are never evenly applied. They are almost always selectively applied. the rich and powerful get away with things for a reason — and they don’t get away with things for a reason.
This whole situation could have been obfuscated or swept under the rug if the right people wanted it to be. The maid could have had an unfortunate accident. She might have had a psych file manifest. Had DSK not been arrested, her story would have been widely perceived as bullshit, if it got out at all.
It is possible that DSK did rape her, and that there was a movement within the system to use that to take him out. The incident does not need to be a setup for the optional enforcement of the law to be a setup. This presents a possibility where both sides of the issue are right.
We now need to look into the ramifications of DSK’s absence. Who benefits? is always the question to ask. If the creation of a sex scandal out of this incident is indeed the setup for a much larger, global crime, then that will be pretty obvious.
Once again, great analysis. Happy to read it here, Fe.
FE, I worked for a short time (9 months) in a women’s state correctional institiution and just this issue was my experience with the desperation and cunning of those women that made me bring this point up on an earlier blog concerning perhaps it being a shock doctrine tactic of sorts. Because of my very strong stand on the rape issue in general, my point on that blog was not something I wanted to promote, and really hoped that there would not be any thing like that going on, for women’s sake in general. (Shadow and light, shadow and light.)
Having said that, I am sorry to change the subject, but I wanted to get this following news out to you. I just went to my pharmacy to ask if I needed a doctor’s prescription to get iodide sulfate pills and was told that the pills are not available. That the store(s) cannot get them. That the government has sequestered our national supply. Could you see what is going on in your pharmacy concerning this when you have time? Keep writing girl. It’s the only way our scream will be heard. Love you.